Global insurer AIG’s Long-Term Issuer Credit Rating of “bbb”, as well as the Financial Strength Ratings and the Long-Term ICRs of its operating subsidiaries, remain unchanged by AM Best following the decision to offload Fortitude Re in a transaction the ratings agency describes as incrementally positive for the group.
AIG expects to use the majority of the proceeds to contribute capital to its insurance company subsidiaries upon closing, which is expected to take place in mid-2020.
Fortitude Re held roughly $31 billion and legacy life and retirement reserves, and an additional $4 billion in general insurance/property/casualty reserves.
The reserve blocks overall were largely non-core legacy products that tended to be longer-duration higher risk products based on AM Best’s product continuum.
AM Best believes the removal of these legacy reserves will improve the holding company’s risk-adjusted capital incrementally and leave it with a more focused reserve profile while still maintaining significant diversification between its existing companies.
